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Wintershall Norge

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12.05.2014

Success in spite of inconclusive dataThe Skarfjell find is a story of how success can be achieved through hard work and a willingness to take risks. It also shows why geologists sometimes have to rely on their experience and knowledge when the data available are unusable.

April 2012. The Songa Delta drilling rig is currently finishing off work 60 km from the Devonian formations in Western Norway. Traditionally, the oil authorities (OD) issue a press release – a brief report on the drilling results.

This time, there is good news. With the 35/9-7 well, the German oil company Wintershall has found light oil in two sandstone layers with a thickness of 90 and 14 meters in the Heather Formation (Late Jurassic). The reservoir quality is also reported to be good. 

"We had faith in the Skarfjell oil prospect. However, there were considerable uncertainties as regards the clarity of the data. We were therefore very relieved when we received the results of the first well", explained Exploration Team Leader Jens-Ole Koch from Wintershall. 

"What we have learned from this well is that you have to think conceptually when the quality of the data prevents you drawing conclusions", he adds. 

Our Danish friend shows a seismic survey that is just a few years old. Having seen the results, one can only agree with him – the image on the prospect level is poor. 

"The old data provided little to no information. We therefore needed a geological model in our heads in order to form an opinion as to what could like beneath the Cretaceous layer." 

The oil authorities revealed that the reservoir could contain up to 160 million barrels of recoverable oil. It later became apparent that the find contains a column over 400 meters high in which the oil lies beneath a layer of gas. 

A medium-sized find
The exploration well raised a number of questions for the geologists. What was interesting was that no oil/water contact was proven, which meant that the size of the find was uncertain.

Koch explains: "There was »oil down to«, i.e. the entire reservoir was saturated with oil down to the thick shale beneath it. This means that the oil/water contact must occur even further down (see cross section).

Two years have passed since the Skarfjell prospect was discovered and two delineation wells have already been drilled. 35/9-8 as well as 35/9-10S and 35/9-10A (S stands for slanted, A stands for deflection). With 35/9-8, oil/water contact could be proven. The production test showed that the reservoir has good flow properties.

"The 35/9-8 delineation well was encouraging. It showed that the layer of sandstone becomes thicker and thicker as it goes down and that there could be a link between the first two wells. This means that the reservoirs are joined. This well too indicated oil/water contact."

The following well, a "slanted well," and a deflection well confirmed the reservoir engineers' suspicions regarding a gas cap. The figures for the estimated reserves were then adjusted to an upper limit of 145 million barrels of recoverable oil and condensate as well as 15 billion m3 of gas. When converted into oil equivalent, this equates to around 230 million barrels.

Wintershall is not planning any further delineation wells. The company feels that it now has enough data to assess whether further development of the find would be worthwhile. According to Koch, there was a good working relationship within the license throughout the search phase.

Skarfjell is regarded as a medium-sized find on the Norwegian continental shelf. It is one of a very large number of fields in the North Sea containing reserves of a few hundred million barrels. In contrast, a find of this size in the Barents Sea would have the media and geologists going crazy.

We should point out that the calculations are very uncertain. The oil authorities and Wintershall are working with a lower limit of just over 120 million barrels of oil equivalent.  However, this is enough hydrocarbons for both the operators and partners to consider the possibilities of further development. A team of 30 men and women is now working on possible development solutions to take the project as far as the next milestone (BOK – decision to proceed). If a project should materialize, further specialists are expected to be deployed.

Nevertheless, it will take years before the field can go into production. Wintershall is working on an early phase of the field development plans and will be able to provide clear information regarding the start of production in due course. Coordinated development of the finds in Quadrant 35 may also need to be considered. 

Identifying the opportunity
Although Skarfjell mainly lies within license 418, parts of two blocks (35/8 and 35/9) lie on the Ryggsteinryggen in the northern section of the North Sea. The license has a long history with changing operators and partners.

It was allocated (along with license 419) in 2007 as part of the TFO 2006 round. The Canadian company Nexen became the principal operator. Among the partners was the newly established Norwegian company Revus Energy.

Around the same time, i.e. in 2006, Wintershall established itself in Norway and obtained its first licenses in 2007 during the TFO 2006 round. At the end of 2008, Revus was completely bought out. At this point, the small company had already achieved considerable success with a number of oil and gas finds in the Norwegian Sea and the North Sea.

"When the licenses 418 and 419 were allocated, no one had seen the Skarfjell prospect – the seismic results were not good enough. There were other reasons why the company that obtained the license showed an interest in the area", explained Koch.

An Agat "look-alike" with a Lower Cretaceous reservoir became the first prospect. At the beginning of 2010, Nexen then drilled in license 419 directly to the west of the Gjøa Field.

"Unfortunately, the well was dry – apart from a tiny amount of oil in the Lower Cretaceous sandstone. The license partners started talking about returning the license. As usual however, a thorough evaluation was carried out before this step was taken, and it was at this point that Skarfjell came to light. The geologists who came from Revus had already seen its potential a few years earlier and thus became the driving force in this process."

"Although Wintershall worked to develop the prospect, neither Premier nor Nexen was keen on the project that was presented to them, and they ultimately decided to withdraw from the license." 

However, Wintershall realized the potential offered by this block, bought the shares held by the partners, and increased its stake from 20 to 65 percent.

"At the same time, a swap was agreed with Nexen. Nexen acquired the prospect in the Norwegian Sea that was much better defined on the seismic devices than Skarfjell", explained Koch.

He now knows that neither oil nor gas was found in the wells drilled for this prospect.

When the Revus founders established Agora Oil and Gas later on, Wintershall sold 20 percent of the license to this company in order to reduce its own risk. The management and the geologists at Agora had total faith in the prospect and therefore wanted to remain involved in the exploration.

"We began the drilling work for 35/9-8 in 2012. At this point, we had carried out a 3D seismic survey but did not have access to the final data."

"Looking back, it would be fair to say that drilling this well was a big risk. We thought the whole thing was a stratigraphic trap. However, there was a structural component that gave us the necessary encouragement." 

Surprisingly good sand
"With numerous finds on all sides, there was no doubt that suitable source sediment could be found near Skarfjell. In light of this source sediment, there was no further risk at all associated with this prospect", said Koch.

"The biggest risk was whether it was actually a trap. As already mentioned, the seismic data did not allow any definite conclusions to be drawn. We had to trust in the fact that we had a reliable geological model."

This was a good decision on the part of Wintershall. The geologists' model was correct. Nevertheless, they were surprised by the drilling results.

"The reservoir with deep marine sand was better than expected", adds Koch.

He explains that the geological forecast for the 35/9-10 delineation well was incorrect. The reservoir was hit around 65 meters higher than expected. Given today's technology, this is a substantial amount.

"The explanation was that the »hot shale« in the Late Jurassic formation is missing here – it has been eroded away. As a result, the well went straight from Cretaceous shale into Late Jurassic sand. Now that the results are known, this is easy to see. However, the example shows that we always have to expect surprises. Another part of the story is that in 2013 Agora was bought by Cairn Energy (which later changed its name to Capricorn). The Skarfjell find was a significant factor in this takeover." 

A look to the future
The Skarfjell find in the northern section of the North Sea is one of a number of small and medium-sized reservoirs discovered on the Norwegian continental shelf in recent years. Finds such as these will account for the majority of Norwegian oil production in the future.

"Gone are the days when clearly defined structural traps could be found. They have all been drilled already. Future finds in the North Sea will be in stratigraphical traps or in a combination of stratigraphical and structural traps.

However, Koch and his team have a good feeling about the future.

"There will also be finds where the data quality is worse than hoped. Skarfjell is a good example of this", said Jens-Ole Koch.

Considerable resources will therefore be needed if new deposits are to be discovered on the Norwegian continental shelf. New technologies, more data and large numbers of "explorationists" are part of the solution. It is already evident that the tax reimbursement scheme and the TFO system are having a very positive effect (GEO 02/2014: "Feeding oil companies with statistics and analyses").

The combination of economic incentives, easy access to the area, competition between the companies, new technology, ample data and a good knowledge of the Norwegian continental shelf is the key to the success seen on the Norwegian continental shelf in recent years. 

Wintershall 
Wintershall is an upstream company with core areas in Germany, the Netherlands, Great Britain, Norway, Russia, Libya and Argentina. The company produces somewhere in the region of 360,000 barrels of oil equivalent per day. The Norwegian continental shelf currently contributes around 40,000 barrels daily. However, the company is aiming to produce 50,000 barrels a day by 2015. The oil produced in Norway comes from the Gjøa, Vega and Brage (operatorship) fields which in total contain reserves of around 100 million barrels of oil equivalent. Production at the Knarr field is due to begin at the end of 2014. A number of projects are currently in the development phase. These include the Maria field off the coast of Central Norway with 130 million barrels of recoverable oil reserves and over 2 billion m3 of recoverable gas. 

Source: Geo 365°, by Halfdan Carstens 

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